Our next digital business transformation case study examines how loyalty management innovator Aimia
is modernizing, consolidating, and standardizing its global IT
infrastructure. As a result of rapid growth and myriad acquisitions,
Montreal-based Aimia is in a leapfrog mode -- modernizing applications,
consolidating data centers, and adopting industry standard platforms.

We'll now learn how improving end-user experiences and leveraging big dataanalytics helps IT organizations head off digital disruption and improve core operations and processes.

To describe how Aimia is entering a new era of strategic IT innovation, we're joined by André Hébert, Senior Vice President of Technology at Aimia in Montreal. Welcome, André.

Gardner:
What are some of the major drivers that have made you seek a common IT
strategy? And tell us about your organization and why having a common
approach is now so important.

Hébert: If you go back in time, Aimia grew through a bunch of acquisitions. We started as Aeroplan, Air Canada's
frequent flyer program and decided to go in the loyalty space. That was
the corporate strategy all along. We acquired two major companies, one
in the UK and one that was US-based, which gave us a global footprint.
As a result of these acquisitions, we ended up with quite a large IT
footprint worldwide and wanted to look at ways of globalizing and also
consolidating our IT footprint.

Gardner:
For many people, when they think of a loyalty program, it's frequent
flyer miles, perhaps points at a specific retail outlet, but this varies
quite a bit market to market around the globe. How do you take
something that's rather fractured as a business and make it a global
enterprise?

Hébert:
We've split the business into two different business units. The first
one is around coalition loyalty. This is where Aimia actually runs the
program. Good examples are Aeroplan in Canada or Nectar
in the UK, where we own the currency, we operate the program, and
basically manage all of the coalition partners. That's one side.

The
other side is what we call our global loyalty solutions. This is where
we run loyalty programs for other companies. Through our standard
technology, we set up a technology footprint within the customer site or
preferably in one of our data centers and we run the technology, but
the program is often white-labeled, so Aimia's name doesn't appear
anywhere. We run it for banks, retailers and many industry verticals.

Almost like money

Gardner:
You mentioned the word currency, and as I think about it, loyalty
points are almost like money -- it is currency -- it can be traded, and it
can be put into other programs. Tell us about this idea. Are you
operating almost like a bank or a virtual currency trader of some sort?

Hébert:
You could say that the currency is like money. It is accumulated. If
you look at our systems, they're very similar to bank-account systems.
So our systems are like banks'. If you look at debit and credit
transactions, they mimic the accumulation and redemption transactions
that our members do.

Gardner:
That's pretty important when it comes to transactions, making sure
integration works among systems. Let's look at this from the perspective
of your challenge. As you say, you came together through a lot of
acquisitions. What's been your challenge from an IT perspective to allow
your company to thrive in this digital economy, given that there is a
transactional integrity issue, but also a lot of disparity in terms of
the types of systems and heterogeneity in systems?

Hébert:
Our biggest challenge was how large the technology footprint was. We
still operate many dozens of data centers across the globe. The project
with HPE is to consolidate all of our technology footprint into four
Tier 3 data centers that are scattered across the globe to better serve
our customers. Those will benefit from the best security standards and
extremely robust data-center infrastructure.

On the infrastructure side, it's all about simplifying, consolidating, virtualizing, using the cloud, leveraging the cloud, but in a virtual private way, so that we also keep our data very secured. That's on the infra side.

On
the application side, we probably have more applications than we have
customers. One of the big drivers there is that we have a global product
strategy. Several loyalty products have now been developed. We're
slowly migrating all of our customers over to our new loyalty systems
that we've created to simplify our application portfolios. We have a
large number of applications today, and the plan is to try to
consolidate all these applications into key products that we've been
developing over the last few years.

We've shopped around for a partner
that can help us in that space and we thought that HPE had the best
credentials, the best offer for us to go forward.

Gardner:
That’s quite a challenge. You're modernizing and consolidating
applications. At the same time, you're consolidating and modernizing
your infrastructure. It reminds me of what HPE did just a few years ago
when it decided to split and to consolidate many data centers. Was that
something that attracted you to HPE, that they have themselves gone
through a similar activity?

Hébert:
Yes, that is one of the reasons. We've shopped around for a partner
that can help us in that space and we thought that HPE had the best
credentials, the best offer for us to go forward.

Virtual Private Cloud (VPC),
a solution that they have offered, is both innovative, yet it is
virtual and private. So, we feel that our customer’s data will be
significantly more secure than just going to any public cloud.

Gardner:
Other key issues for you are data privacy and security. Again, if this
is like currency, if transactions are involved and you're also dealing
with multiple markets, different regulatory agencies, and different
regulatory environments, that's another complication. How is
consolidating applications and modernizing infrastructure at the same
time helping you to manage these compliance and data-protection issues?

Raising the bar

Hébert:
The modernization and infrastructure consolidation is, in fact, helping
greatly in continuing to secure data and meet ever more difficult
security standards, such as PCI and DSS 3.0. Through this process, we're going to raise the bar significantly over data privacy.

Gardner:
André, a lot of organizations don't necessarily know how to start.
There's so much to do when it comes to apps, data, infrastructure
modernization and, in your case, moving to VPC. Do you have any thoughts
about how to chunk that out, how to prioritize, or are you making this
sort of a big bang approach, where you are going to do it all at once
and try to do it as rapidly as possible? Do you have a philosophy about
how to go about something so complex?

Hébert: We've actually scheduled the whole project. It’s a three-year journey
into the new HPE world. We decided to attack it by region, starting with
Canada and the US, North America. Then, we moved on to zooming into
Asia-Pacific, and the last phase of the project is to do Europe. We
decided to go geographically.

The
program is run centrally from Canada, but we have boots on the ground
in all of those regions. HPE has taken the lead into the actual
technical work. Aimia does the support work, providing documentation,
helping with all of the intricacies of our systems and the
infrastructure, but it's a co-led project, with HPE doing the heavy
lifting.

Gardner:
Something about costs comes to mind when you go standard. Sometimes,
there are some upfront cost, you have to leapfrog that hurdle, but your
long-term operating costs can be significantly lower. What is it about
the cost structure? Is it the standardized infrastructure platforms, are
you using cheaper hardware, is it open source software, all the above?
How do you factor this as a return on investment (ROI) type of an equation?

Hébert:
It’s all of the above. Because we're right in the middle of this
project, it will allow us to standardize, to evergreen, a lot of our
technology that was getting older. A lot of our servers were getting
old. So, we're giving the infrastructure a shot in the arm as far as
modernization.

From
a VPC point of view, we're going to leverage this internal cloud much
more significantly. From a CPU point of view, and from an infrastructure
point of view, we're going to have significantly fewer physical servers
than what we have today. It's all operated and run by HPE. So, all of
the management, all of the ITO work is done by HPE, which means that we
can focus on apps, because our secret sauce is in apps, not in
infrastructure. Infrastructure is a necessary evil.

Gardner: That brings up another topic, DevOps.
When you're developing, modernizing, or having a continuous-development
process for your applications, if you have that cloud and
infrastructure in place and it’s modern, that can allow you to do more
with the development phase. Is that something you've been able to
measure at all in terms of the ability to generate or update apps more
rapidly?

Hébert:
We're just dipping our toe into advanced DevOps, but definitely there
are some benefits around that. We're currently focused on trying to get
more value from that.

Gardner:
When you think about ROI, there are, of course, those direct costs on
infrastructure, but there are ancillary benefits in terms of agility,
business innovation, and being able to come to market faster with new
products and services. Is that something that is a big motivator for you
and do you have anything to demonstrate yet in terms of how that could
factor?

Relationship 2.0

Hébert:
We're very much focused right now on what I would say is Relationship
1.0, but HPE was selected as a partner for their ability to innovate.
They also are in a transition phase, as we all know, so while we're
focused on getting the heavy lifting done, we're focusing on innovation
and focusing on new projects with HPE. We actually call that
Relationship 2.0.

Gardner:
For others who are looking at similar issues -- consolidation,
modernization, reducing costs over time, leveraging cloud models -- any
words of advice now that you are into this journey as to how to best go
about it or maybe things to avoid?

Hébert:
When we first looked at this, we thought that we could do a lot of that
consolidation work ourselves. Consolidating 42 data centers into 4 is a
big job, and where HPE helps in that regard is that they bring the
experience, they bring the teams, and they bring the focus to this.

We
probably could have done it ourselves. It probably would have cost more
and it probably would have taken longer. One of the benefits that I
also see is that HPE manages thousands and thousands of servers. With
their ability to automate all of the server management, they've taken it
to a level. As a small company, we couldn’t afford to do all of the
automation that they can afford doing on these thousands of servers.

We
probably could have done it ourselves. It probably would have cost more
and it probably would have taken longer.

Gardner:
Before we close out, André, looking to the future -- two, three, four
years out -- when you've gone through this process, when you've gotten
those modern apps and they are running on virtual private clouds and you
can take advantage of cloud models, where do you see this going next?

Do
you have some ideas about mobile applications, about different types of
transactional capabilities, maybe getting more into the retail sector?
How does this enable you to have even greater growth strategically as a
company in a few years?

Hébert:
If you start with the cloud, the world is about to see a very different
cloud model. If you fast forward five years, there will be mega clouds,
and everybody will be leveraging these clouds. Companies that actually
purchase servers will be a thing of the past.

When
it comes to mobile, clearly Aimia’s strategy around mobile is very
focused. The world is going mobile. Most apps will require mobile
support. If you look at analytics, we have a whole other business that
focuses on analytics. Clearly, loyalty is all about making all this data
make sense, and there's a ton of data out there. We have got a business
unit that specializes in big data, in advanced analytics, as it
pertains to the consumers, and clearly for us it is a very strategic
area that we're investing in significantly.

Gardner:
Getting all your i’s dotted and t's crossed in the infrastructure can
pay huge dividends for years to come, especially, as you say, when you
can focus more on the analytics, on the applications, on your business
model, and less on server maintenance.

Hébert: That’s correct.

Gardner:
I'm afraid we'll have to leave it there. We've been learning how
loyalty management innovator Aimia is modernizing, consolidating, and
standardizing its global IT infrastructure. We've heard how improving
end-user experiences and using big data analytics helps head off digital
disruption and improve core operations.

Gardner:And
I'd like to thank our audience as well for joining us for this Hewlett
Packard Enterprise Voice of the Customer podcast. I'm Dana Gardner,
Principal Analyst at Interarbor Solutions, your host for this ongoing
series of HPE-sponsored discussions. Thanks again for listening, and do
come back next time.

Transcript of a discussion on how improving end user experiences and using big data analytics helps head off digital disruption and improve core operations. Copyright Interarbor Solutions, LLC, 2005-2016. All rights reserved.